Lithuanian President Gitanas Nauseda on Thursday suggested raising the non-taxable personal income threshold to 510 euros, from the current 460 euros, as part of measures to help people cope with high inflation.
“This is a measure aimed at people with the lowest incomes; it is a targeted and purposeful measure,” the president told a press conference. “Yes, someone may say that we have already increased it to 460 euros in the 2022 budget, but you have to agree that what we did at a time when the inflation problem did not yet exist or had just started to emerge is not enough,” he said. Nauseda also suggests providing one-off payments of 100 euros to some of the most vulnerable groups, such as pensioners, or families with many children or those struggling to make ends meet. “It is appropriate to consider one-off payments to the most vulnerable social groups. I am speaking about recipients of old-age pensions and social assistance pensions,” the president said, adding that the payment could amount to 100 euros.
“We are also speaking about large families with children with disabilities and, of course, families experiencing financial problems,” he said. The parliament will be asked to debate amendments to the non-taxable personal income threshold at a special session in February. If approved, the measure would be effective from the start of this year or from July, according to Nauseda. The president says his proposed measures might need some 150-200 million euros, adding that the extra money would be additionally collected into the state budget because of the rising inflation. “As the real inflation will be three to four times higher than estimated in the 2022 budget, we can get around 150 million euros, probably up to 200 million euros, in additional revenue. The fiscal effect of those measures I talked about would in fact make around the same amount I mentioned,” Nauseda said. He pointed out that the 2022 budget was approved with an inflation estimate of 2.5 percent, which now does not match the reality. The president also points out that the government’s proposed measures to mitigate rising prices –a 0 percent VAT rate on heating and additional support for residential solar power plants – are insufficient and seem “very and very modest”. “I would dare to say that these measures are practically not solving the inflation problem,” he added. Nevertheless, he approved the decision to cut the VAT rate on heating to zero as that would help to reduce prices for some residents.
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